What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-13 · 227 added, 251 removed, 342 unchanged (58% of the section changed)

3 unchanged sentences

(in thousands, except par value data)

September 30, 2024

March 31, 2025

December 31, 2024

21 unchanged sentences

Unsecured contingent payment obligations

Related party note payable, net of current portion

Convertible notes, net of current portion

Related party convertible notes, net of current portion

Related party note payable, net of current portion

Total long-term liabilities

4 unchanged sentences

SHAREHOLDERS' DEFICIT:

Common stock, $ 0.01 par value, 175,000 shares authorized, 96,351 and 87,681 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Common stock, $ 0.01 par value, 225,000 shares authorized, 117,519 and 113,970 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

8 unchanged sentences

PARKERVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of sales

1 unchanged sentence

Total operating expenses

Interest income

Interest expense

2 unchanged sentences

Provision for income taxes

Net (loss) income

Other comprehensive income, net of tax

Comprehensive (loss) income

(Loss) earnings per common share

Comprehensive loss

Basic and diluted net loss per common share

Weighted average common shares outstanding

3 unchanged sentences

(in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Total shareholders' deficit, beginning balances

Beginning balances

Issuance of common stock and warrants in private offerings, net of issuance costs

Issuance of common stock upon exercise of options and warrants

Issuance of common stock, warrants, and options for services

Issuance of common stock upon conversion and payment of interest-in-kind on convertible debt

Share-based compensation, net of shares withheld for taxes

Ending balances

Common Stock Outstanding

Common Stock, Par Value

Additional Paid-in Capital

Beginning balances

Accumulated Deficit

Total Shareholders' Deficit

Balance as of December 31, 2024

Issuance of common stock and warrants in private offerings, net of issuance costs

Issuance of common stock upon exercise of options and warrants

Issuance of common stock, warrants, and options for services

Issuance of equity-based instruments for services

Issuance of common stock upon conversion and payment of interest-in-kind on convertible debt

Share-based compensation, net of shares withheld for taxes

Ending balances

Share-based compensation

Comprehensive loss for the period

Balance as of March 31, 2025

Common Stock Outstanding

Common Stock, Par Value

Additional Paid-in Capital

Accumulated Deficit

Beginning balances

Comprehensive (loss) income for the period

Ending balances

Total shareholders' deficit, ending balances

Total Shareholders' Deficit

Balance as of December 31, 2023

Issuance of equity-based instruments for services

Issuance of common stock upon conversion and payment of interest-in-kind on convertible debt

Share-based compensation

Comprehensive loss for the period

Balance as of March 31, 2024

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

1 unchanged sentence

Loss (gain) on changes in fair value of contingent payment obligations

(Gain) loss on disposal/impairment of equipment and intangible assets

Paid in kind interest expense

2 unchanged sentences

Accounts payable and accrued expenses

Total adjustments

Net cash (used in) provided by operating activities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

Payments for patent costs and licenses

Capitalized patent costs

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock in private offerings

Net payments from issuance of common stock and warrants in private offerings

Net proceeds from exercise of options and warrants

Net proceeds from debt financings

Proceeds from contingent payment obligation

Repayment of contingent payment obligation

Principal payments on long-term debt

Net cash provided by (used in) financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET DECREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

5 unchanged sentences

ParkerVision, Inc.

(“ParkerVision”, “we” or the “Company”) is in the business of innovating fundamental wireless hardware technologies and products.

(“ParkerVision”, “we” or the “Company”) is in the business of innovating and licensing fundamental wireless technologies.

We have designed and developed proprietary radio frequency (“RF”) technologies and integrated circuits based on those technologies, and we license those technologies to others for use in wireless communication products.

We currently have five licensees of our technologies.

We have expended significant financial and other resources to research and develop our RF technologies and to obtain patent protection for those technologies in the United States of America (“U.S.”) and certain foreign jurisdictions.

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district courts against mobile handset, smart television and other WiFi product providers, as well as semiconductor suppliers, for the infringement of a number of our RF patents.

We have made significant investments in developing and protecting our technologies.

We have made significant investments in developing and protecting our technologies, the returns on which are dependent upon the generation of future revenues for realization.

Liquidity and Going Concern

For the nine months ended September 30, 2024 , we incurred a net loss of approximately $ 11.8 million and incurred negative cash flows from operations of approximately $ 2.1 million.

At September 30, 2024 , we had cash and cash equivalents of approximately $ 0.8 million and an accumulated deficit of approximately $ 445.5 million.

At September 30, 2024 , we had $ 2.4 million in current liabilities, including approximately $ 1.1 million in convertible debt that matures over the next twelve months.

For the three months ended March 31, 2025 , we incurred a net loss of approximately $ 3.8 million and incurred negative cash flows from operations of approximately $ 1.8 million.

At March 31, 2025 , we had cash and cash equivalents of approximately $ 3.3 million and an accumulated deficit of approximately $ 452.0 million.

At March 31, 2025 , we had $ 2.9 million in current liabilities, including approximately $ 1.6 million in convertible debt that matures over the next twelve months.

In addition, a significant amount of future proceeds that we may receive from our patent enforcement and licensing programs will first be utilized to repay borrowings and legal fees and expenses under our contingent funding arrangements.

These circumstances raise substantial doubt about our ability to continue to operate as a going concern for a period of one year following the issue date of these condensed consolidated financial statements.

Approximately $ 0.64 million in convertible notes, including accrued interest thereon, were converted by the holders into shares of our common stock subsequent to September 30, 2024, and all of our remaining convertible notes have conversion prices that are substantially below the market price of our common stock as of September 30, 2024.

We anticipate that all of our outstanding convertible notes will be converted by the holders prior to their scheduled maturity dates.

However, even with the anticipated conversions of our convertible debt, our current capital resources are not sufficient to meet our liquidity needs for the next twelve months and we will be required to seek additional capital.

Our ability to meet our liquidity needs for the next twelve months is dependent upon (i) our ability to successfully negotiate licensing agreements and/or settlements relating to the use of our technologies by others in excess of our contingent payment obligations, (ii) our ability to control operating costs, and/or (iii) our ability to obtain additional debt or equity financing.

The timing and amount of proceeds from our patent enforcement actions are difficult to predict and there can be no assurance we will receive any proceeds from these enforcement actions.

Refer to Note 12 for a complete discussion of our patent enforcement proceedings.

We expect that proceeds received by us from patent enforcement actions and technology licenses over the next twelve months may not alone be sufficient to cover our working capital requirements.

In addition, although all of our convertible notes have conversion prices that are currently below the market price of our common stock, conversion is at the option of the holder and there can be no assurance that the holders will exercise their conversion option prior to maturity.

Even with the conversions of our convertible debt by the holders, our current capital resources are not sufficient to meet our liquidity needs for the next twelve months and we may be required to seek additional capital.

Our ability to meet our liquidity needs for the next twelve months is dependent upon (i) our ability to successfully negotiate licensing agreements and/or settlements relating to the use of our technologies by others in excess of our contingent payment obligations, (ii) our ability to control operating costs, (iii) the exercise behavior of our convertible note holders, and/or (iii) our ability to obtain additional debt or equity financing.

We expect to continue to invest in the support of our patent licensing and enforcement program.

The long-term continuation of our business plan is dependent upon the generation of sufficient cash flows from our technologies and/or products to offset expenses and debt obligations.

The long-term continuation of our business plan is dependent upon the generation of sufficient cash flows from our technology licenses to offset expenses and debt obligations.

In the event that we do not generate sufficient cash flows, we will be required to obtain additional funding through public or private debt or equity financing or contingent fee arrangements and/or reduce operating costs.

1 unchanged sentence

Basis of Presentation

The unaudited condensed consolidated financial statements for the three and nine month periods ended September 30, 2024 were prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10 -Q and Rule 10 - 01 of Regulation S- X.

Operating results for the nine months ended September 30, 2024 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 , or future years.

The unaudited condensed consolidated financial statements for the three month period ended March 31, 2025 were prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10 -Q and Rule 10 - 01 of Regulation S- X.

Operating results for the three months ended March 31, 2025 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 , or future years.

All normal and recurring adjustments which, in the opinion of management, are necessary for a fair statement of the consolidated financial condition and results of operations have been included.

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and its wholly-owned German subsidiary, ParkerVision GmbH, after elimination of all intercompany transactions and accounts.

ParkerVision GmbH was dissolved and any remaining assets reverted back to the parent company as of September 30, 2024.

ParkerVision GmbH was dissolved and any remaining assets reverted back to the parent company as of December 31, 2024.

Accounting Policies

4 unchanged sentences

We recognize such payments as revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”

No revenue was recognized during the nine months ended September 30, 2024 .

We recognized $ 25.0 million of revenue during the nine -month period ended September 30, 2023 from a patent license and settlement agreement with a third party for their use of our technologies.

Our performance obligations were satisfied, and therefore revenue recognized, upon transfer of the licensed rights and dismissal of all patent enforcement actions between the parties.

(Loss) Earnings per Common Share

Basic (loss) earnings per common share is determined based on the weighted-average number of common shares outstanding during each period.

Diluted loss per common share is the same as basic loss per common share for the three and nine months ended September 30, 2024 as all common share equivalents are excluded from the calculation because their effect is anti-dilutive.

The dilutive effect of outstanding options and warrants is calculated using the treasury stock method.

The dilutive effect of shares underlying convertible notes is calculated using the if-converted method.

The following table shows the computation of basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2024 and 2023 (net (loss) income and shares in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Net (loss) income

$ ( 10,807 ) $ ( 3,923 ) $ ( 11,827 ) $ 10,625

Effect of dilutive securities

Net (loss) income adjusted for dilutive effect

( 10,807 ) ( 3,923 ) ( 11,827 ) 10,927

Weighted-average basic shares outstanding

90,340 86,330 89,067 85,163

Effect of dilutive securities

Weighted-average diluted shares

90,340 86,330 89,067 119,558

Basic (loss) earnings per share

$ ( 0.12 ) $ ( 0.05 ) $ ( 0.13 ) $ 0.12

Diluted (loss) earnings per share

$ ( 0.12 ) $ ( 0.05 ) $ ( 0.13 ) $ 0.09

Diluted (loss) earnings per common share for the three and nine months ended September 30, 2024 and 2023 excludes shares underlying options, warrants, and convertible notes that are anti-dilutive.

The anti-dilutive common share equivalents at September 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

No revenue was recognized during the three months ended March 31, 2025 and 2024 .

Loss per Common Share

Basic loss per common share is determined based on the weighted-average number of common shares outstanding during each period.

Diluted loss per common share is the same as basic loss per common share as all common share equivalents are excluded from the calculation because their effect is anti-dilutive.

We have shares underlying outstanding options, restricted stock units ("RSUs"), warrants, and convertible notes that were excluded from the computation of diluted loss per share as their effect would have been anti-dilutive.

These common share equivalents at March 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended March 31,

Options outstanding

26,539 25,534 26,539 25,534

Unvested RSUs

Warrants outstanding

7,746 10,346 7,746 10,346

Shares underlying convertible notes

33,711 36,425 33,711 -

67,996 72,305 67,996 35,880

Intangible Assets

Intangible assets consist of the following (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

Patents and copyrights

$ 10,465 $ 10,431

Accumulated amortization

( 9,576 ) ( 9,376 )

$ 889 $ 1,055

Related Party Note Payable

2 unchanged sentences

We are currently in compliance with all the terms of the note.

At September 30, 2024 , we estimate the note has an aggregate fair value of approximately $ 0.3 million and would be categorized within Level 2 of the fair value hierarchy.

Convertible Notes

For the three and nine months ended September 30, 2024 , convertible notes with a face value of $ 0.3 million were converted, at the option of the holder, into approximately 3.6 million shares of our common stock.

No convertible notes were repaid during the three months ended September 30, 2024, and during the nine months ended September 30, 2024 we repaid an aggregate of $ 0.05 million of notes at maturity.

For the three and nine months ended September 30, 2024 , we recognized interest expense of approximately $ 0.1 million and $ 0.3 million, respectively, related to the contractual interest on our convertible notes.

During the three months ended September 30, 2024, we elected to pay $ 0.10 million of interest payments in shares of our common stock and issued approximately 0.65 million shares of our common stock as interest-in-kind payments.

During the nine months ended September 30, 2024 , we elected to pay $ 0.28 million of interest payments in shares of our common stock and issued approximately 1.7 million shares of our common stock as interest-in-kind payments.

At September 30, 2024 , we estimate our convertible notes have an aggregate fair value of approximately $ 3.7 million and would be categorized within Level 2 of the fair value hierarchy.

Convertible notes payable at September 30, 2024 and December 31, 2023 consist of the following (in thousands):

For the three months ended March 31, 2025 , convertible notes with a face value of $ 0.2 million were converted, at the option of the holder, into approximately 1.3 million shares of our common stock.

No convertible notes were converted during the three months ended March 31, 2024 .

No convertible notes were repaid during the three months ended March 31, 2025 and 2024 .

For the three months ended March 31, 2025 and 2024 , we recognized interest expense of approximately $ 0.1 related to the contractual interest on our convertible notes.

During the three months ended March 31, 2025 and 2024 , we elected to pay $ 0.1 million of interest payments in shares of our common stock and issued approximately 0.1 million shares and 0.6 million shares, respectively, of our common stock as interest-in-kind payments.

Convertible notes payable at March 31, 2025 and December 31, 2024 consist of the following (in thousands):

Principal Outstanding as of

September 30,

Fixed Conversion Rate

3 unchanged sentences

$ 0.25 8.0 % March 18, 2026

Convertible notes dated February/March 2019

$ 0.25 8.0 % February 28, 2026 to March 13, 2026

Convertible note dated June 2019

$ 0.10 8.0 % December 1, 2024 1

Convertible note dated June 2019

Convertible notes dated March 2019

$ 0.25 8.0 % March 13, 2026

2 unchanged sentences

Convertible notes dated July 18, 2019

$ 0.08 7.5 % December 1, 2024 4

Convertible note dated September 13, 2019

$ 0.10 5.0 % March 15, 2026 5

Convertible notes dated January 8, 2020

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$ 0.16 9.0 % January 13, 2028

Convertible note dated September 15, 2023

$ 0.25 8.0 % March 15, 2026

Total principal balance

1 unchanged sentence

$ 1,483 $ 2,798

On June 3, 2024, this note was amended to extend the maturity date to December 1, 2024.

This note was converted, at the option of the holder, into shares of our common stock in October 2024.

2 On May 10, 2024, this note, held by a director of ours, was amended to extend its maturity date to March 15, 2026 and reduce its interest rate on a going forward basis from 8 % to 5 %.

In September 2024, this note was converted, at the option of the holder, into shares of our common stock.

3 Between June 18 and July 9, 2024, these notes were amended to extend the maturity dates to January 15, 2026 through March 19, 2026.

4 On June 3, 2024, notes with an aggregate face value of $ 200,000 were amended to extend their maturity date from July 18, 2019 to December 1, 2024.

These notes were subsequently converted at the option of the holders in September 2024 into shares of our common stock.

On July 8, 2024, the remaining note, with a face value of $ 500,000 , was amended to extend its maturity date from July 18, 2024 to December 1, 2024, and to add multiple automatic extensions of the maturity date, provided the holder does not revoke the extension option in writing at least ten ( 10 ) days prior to the then applicable maturity date.

The first automatic extension will extend the maturity date by six months, to June 1, 2025, and the subsequent automatic extensions will extend the maturity date by up to ten ( 10 ) one -year periods.

5 On May 10, 2024, this note, held by a director of ours, was amended to extend its maturity date to March 15, 2026 and reduce its interest rate on a going forward basis from 8 % to 5 %.

In September 2024, this note was converted, at the option of the holder, into shares of our common stock.

6 On July 8, 2024, a note with a face value of $ 400,000 was amended to provide for up to ten ( 10 ) one -year automatic extensions of the original maturity date, at the original stated interest rate, provided the holder does not revoke the extension option in writing at least ten ( 10 ) trading days prior to the then applicable maturity date.

7 On July 8, 2024, this note was amended to provide for up to ten ( 10 ) one -year automatic extensions of the original maturity date, at the original stated interest rate, provided the holder does not revoke the extension option in writing at least ten ( 10 ) trading days prior to the then applicable maturity date.

In addition, the note was amended to reduce the conversion price from $ 0.16 to $ 0.11 .

Subsequent to September 30, 2024, notes with an aggregate face value of $ 0.64 million were converted into shares of our common stock at conversion prices ranging from $ 0.10 to $ 0.25 .

1 Unless otherwise revoked by the holder with ten days of the then-stated maturity date, the maturity date of the note will automatically extend by one year, for a maximum of ten years.

We have convertible notes payable to related parties with a face value of $ 0.2 million at March 31, 2025 and December 31, 2024.

These notes were issued between May and August 2022, have a fixed conversion price of $ 0.13 , accrue interest at 8.0 % interest per annum, and mature between May 10, 2027 and August 3, 2027.

Contingent Payment Obligations

Secured Contingent Payment Obligation

The following table provides a reconciliation of our secured contingent payment obligation, measured at estimated fair value, for the nine months ended September 30, 2024 and the year ended December 31, 2023 (in thousands):

Nine Months Ended September 30, 2024

The following table provides a reconciliation of our secured contingent payment obligation, measured at estimated fair value, for the three months ended March 31, 2025 and the year ended December 31, 2024 (in thousands):

Three Months Ended March 31, 2025

Year Ended December 31, 2024

2 unchanged sentences

Change in fair value

9,878 ( 2,381 )

Secured contingent payment obligation, end of period

13 unchanged sentences

We have elected to measure our secured contingent payment obligation at its estimated fair value based on probability-weighted estimated cash outflows, discounted back to present value using a discount rate determined in accordance with accepted valuation methods (see Note 11 ).

The secured contingent payment obligation is remeasured to fair value at each reporting period with changes recorded in the condensed consolidated statements of comprehensive income (loss) until the contingency is resolved.

The underlying carrying value of the Note, which includes the Face Value plus accrued interest, was approximately $ 57.1 million and $ 51.0 million as of September 30, 2024 and December 31, 2023 , respectively.

The underlying carrying value of the Note, which includes the Face Value plus accrued interest, was approximately $ 61.2 million and $ 59.2 million as of March 31, 2025 and December 31, 2024 , respectively.

The range of potential proceeds payable to Brickell is discussed more fully in Note 11.

As of September 30, 2024 , we are in compliance with our obligations under the Note and the PPFPA.

As of March 31, 2025 , we are in compliance with our obligations under the Note and the PPFPA.

Unsecured Contingent Payment Obligations

The following table provides a reconciliation of our unsecured contingent payment obligations, measured at estimated fair value, for the nine months ended September 30, 2024 and the year ended December 31, 2023 (in thousands):

Nine Months Ended September 30, 2024 Year Ended December 31, 2023

The following table provides a reconciliation of our unsecured contingent payment obligations, measured at estimated fair value, for the three months ended March 31, 2025 and the year ended December 31, 2024 (in thousands):

Three Months Ended March 31, 2025 Year Ended December 31, 2024

Unsecured contingent payment obligations, beginning of period

8 unchanged sentences

Fair Value Measurements

The following tables summarize the fair value of our contingent payment obligations measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 (in thousands):

Our convertible notes are recorded at face value in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 .

As of March 31, 2025 and December 31, 2024 , the estimated fair value of our convertible notes was approximately $ 2.78 million and $ 2.81 million, respectively and would be categorized within Level 2 of the fair value hierarchy.

The following tables summarize the fair value of our contingent payment obligations measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 (in thousands):

Fair Value Measurements

3 unchanged sentences

Significant Unobservable Inputs (Level 3)

September 30, 2024:

March 31, 2025:

Secured contingent payment obligation

13 unchanged sentences

The fair values of our secured and unsecured contingent payment obligations were estimated using a probability-weighted income approach based on various cash flow scenarios as to the outcome of patent-related actions both in terms of timing and amount, discounted to present value using a risk-adjusted rate.

We used a risk-adjusted discount rate for the secured and unsecured contingent payment obligations of 17.58 % and 17.82 %, respectively, at September 30, 2024 , based on a risk-free rate of 3.58 % and 3.82 %, respectively, as adjusted by 8 % for credit risk and 6 % for litigation inherent risk.

The following table provides quantitative information about the significant unobservable inputs used in the measurement of fair value for both the secured and unsecured contingent payment obligations at September 30, 2024 , including the lowest and highest undiscounted payout scenarios as well as a weighted average payout scenario based on relative undiscounted fair value of each cash flow scenario.

We used risk-adjusted discount rates for the secured and unsecured contingent payment obligations of 17.89 % and 17.96 %, respectively, at March 31, 2025 , based on risk-free rates of 3.89 % and 3.96 %, respectively, as adjusted by 8 % for credit risk and 6 % for litigation inherent risk.

We used risk-adjusted discount rates for the secured and unsecured contingent payment obligations of 18.27 % and 18.21 %, respectively, at December 31, 2024, based on risk-free rates of 4.27 % and 4.21 %, respectively, as adjusted by 8 % for credit risk and 6 % for litigation inherent risk.

The following table provides quantitative information about the significant unobservable inputs used in the measurement of fair value for both the secured and unsecured contingent payment obligations at March 31, 2025 and December 31, 2024 , including the lowest and highest undiscounted payout scenarios as well as a weighted average payout scenario based on relative undiscounted fair value of each cash flow scenario.

March 31, 2025

Secured Contingent Payment Obligation

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15 % 19 % 25 % 15 % 21 % 25 %

December 31, 2024

Secured Contingent Payment Obligation

Unsecured Contingent Payment Obligations

Unobservable Inputs

Weighted Average

Estimated undiscounted cash outflows (in millions)

$ - $ 65.3 $ 150.0 $ - $ 7.8 $ 10.8

Duration (in years)

1.0 2.8 3.5 1.0 1.6 3.5

Estimated probabilities

15 % 19 % 25 % 15 % 21 % 25 %

We evaluate the estimates and assumptions used in determining the fair value of our contingent payment obligations each reporting period and make any adjustments prospectively based on those evaluations.

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Court of Appeals for the Federal Circuit

On September 6, 2024, the U.S.

Court of Appeals for the Federal Circuit ("CAFC") issued its opinion, ruling in our favor on each of the issues we appealed and remanding the case back to the Middle District of Florida (Orlando) where the case will be reopened.

The CAFC appeal was the result of several district court rulings on pre-trial motions issued in March 2022 in our patent infringement case against Qualcomm, a case that was originally filed in May 2014.

On September 6, 2024, the U.S Court of Appeals for the Federal Circuit ("CAFC") issued its opinion, ruling in our favor on each of the issues we appealed and remanding the case back to the Middle District of Florida (Orlando Division) where the case was reopened.

The CAFC appeal was filed following several March 2022 district court rulings on pre-trial motions in our patent infringement case against Qualcomm, a case that was originally filed in May 2014.

The district court granted Qualcomm motions to strike and exclude our technical expert report, essentially precluding the support of infringement testimony at trial and also issued an order granting Qualcomm's motion for summary judgment ruling that Qualcomm did not infringe the remaining three patents in the case.

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On August 1, 2024, the district court issued such an order, and on August 7, 2024, the matter was transferred back to the CAFC for its decision which was then issued on September 6, 2024.

On November 4, 2024, we filed a motion with the district court requesting a scheduling conference, trial setting, and identification of issues that require the court's resolution before trial.

As a result of the district court's summary judgment motion in favor of Qualcomm in 2022, Qualcomm had the right to petition the court for its fees and costs.

The court granted Qualcomm's motion to delay such a petition until after the issuance of the appellate court’s mandate.

Given the favorable decision by the CAFC, Qualcomm is not entitled to its fees and costs in relation to the now-vacated 2022 summary judgment decision.

We are represented in this case on a full contingency fee basis.

The parties have submitted to the district court a summary of pre-trial motions that remain open and a request for a trial schedule.

In addition, Qualcomm filed a new motion requesting additional claim construction which the court initially denied but then granted on reconsideration.

Both parties submitted their additional claim construction briefs in April 2025.

In March 2025, we filed a motion to substitute our infringement and validity expert due to the medical incapacity of our current expert.

The court has not yet ruled on this motion.

The court indicated that it would establish a trial date at a pre-trial conference, following its rulings on all outstanding motions.

Curently, no pre-trial conference or trial date has been scheduled.

This patent infringement case was originally filed in the Middle District of Florida in May 2014.

The case was stayed in February 2016 pending decisions in other cases, including the appeal of a PTAB proceeding with regard to U.S.

patent 6,091,940 (“the ‘940 Patent”) asserted in this case.

In March 2017, the PTAB ruled in our favor on three of the six petitions (the method claims), ruled in Qualcomm’s favor on two of the six petitions (the apparatus claims) and issued a split decision on the claims covered in the sixth petition.

In September 2018, the Federal Circuit upheld the PTAB’s decision with regard to the ‘940 Patent and, in January 2019, the court lifted the stay in this case.

In July 2019, the court issued an order that granted our proposed selection of patent claims from four asserted patents, including the ‘940 Patent, and denied Qualcomm’s request to limit the claims and patents.

The court also agreed that we may elect to pursue accused products that were at issue at the time the case was stayed, as well as new products that were released by Qualcomm during the pendency of the stay.

In September 2019, Qualcomm filed a motion for partial summary judgment in an attempt to exclude certain patents from the case, including the ‘940 Patent.

The court denied this motion in January 2020.

In April 2020, the court issued its claim construction order in which the court adopted our proposed construction for seven of the ten disputed terms and adopted slightly modified versions of our proposed construction for the remaining terms.

Discovery in this case was closed in January 2021.

In March 2021, the court granted Qualcomm’s motion to strike certain of our 2020 infringement contentions.

As a result of this ruling, in July 2021, we filed a joint motion for entry of a judgment of non-infringement of our Patent No.

7,865,177, subject to appeal.

Citing the backlog due to the pandemic, among other factors, the court moved several scheduled deadlines.

Joint pre-trial statements were submitted by the parties in May 2021.

In January 2022, the court held a hearing to allow the parties to present their respective positions on three outstanding motions.

In March 2022, the district court rulings in favor of Qualcomm closed the district court case, subject to our appeal.

As a result of the court’s summary judgment motion in favor of Qualcomm, Qualcomm had the right to petition the court for its fees and costs, a right that was subsequently mooted given the CAFC's decision to vacate the 2022 summary judgement decision.

Our damages expert has submitted a report supporting a damages ask of $ 1.3 billion for Qualcomm’s unauthorized use of our technology.

Such amount excludes additional amounts requested by us for interest and enhanced damages for willful infringement.

Ultimately, the amount of damages, if any, will be determined by the court.

ParkerVision v.

4 unchanged sentences

In March 2020, as a result of the impact of COVID- 19, the parties filed a motion requesting an extension of certain deadlines in the case.

In April 2020, the court stayed this proceeding pending the outcome of the infringement case against Qualcomm in the Orlando Division of the Middle District of Florida, which is currently pending an appeal.

In April 2020, the court stayed this proceeding pending the outcome of the infringement case against Qualcomm in the Orlando Division of the Middle District of Florida.

ParkerVision v.

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ParkerVision v.

Intel (Western District of Texas)

We filed two patent infringement complaints in the Western District of Texas against Intel Corporation ("Intel") in 2020, alleging infringement of approximately ten of our patents by Intel cellular, WiFi and Bluetooth products.

The first case was scheduled for trial commencing February 6, 2023.

Beginning in November 2022, the parties filed a number of pre-trial motions.

The court held hearings on these pre-trial motions in January 2023.

The court issued its written orders with regard to these motions immediately prior to the February 6, 2023 trial start date.

As a result of the court's pre-trial rulings, the potential damages in the case decreased significantly.

On February 7, 2023, the parties resolved their outstanding dispute and we dismissed all pending actions against Intel.

ParkerVision v.

Realtek (Western District of Texas)

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("Realtek"), the first in 2022 and a second in 2023, alleging infringement of an aggregate of seven of our patents.

One of the seven patents was dropped from the litigation in August 2024.

A claim construction hearing was held in January 2024 in the first Realtek action and the court adopted the majority of our claim constructions.

A jury trial for the first Realtek action is scheduled for July 2025 .

A jury trial for the first Realtek action was originally scheduled for July 2025, but it is anticipated that the trial will be rescheduled for January 2026 due to ongoing discovery.

A claim construction hearing was held in June 2024 in the second Realtek action, and the special master appointed by the court recommended the majority of the claim constructions in our favor.

A trial date has not yet been scheduled in the second Realtek action.

The court adopted the special master recommendations in November 2024.

The trial for the second Realtek action has been rescheduled for April 2026.

ParkerVision v.

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(collectively, "MediaTek"), the first in 2022 and two additional cases in 2023, alleging infringement of an aggregate of ten of our patents.

One of the patents was dropped from the first MediaTek case following an inter partes review (" IPR ") petition filed by MediaTek which was subsequently terminated.

One of the patents was dropped from the first MediaTek case in 2024 and MediaTek likewise terminated an inter partes review (" IPR ") petition it had initiated against the same patent.

A claim construction hearing was held in January 2024 in the first MediaTek action and the court adopted the majority of our claim constructions.

A jury trial for the first MediaTek action is currently scheduled for June 2025.

A claim construction hearing was held in June 2024 in the second MediaTek action, and the special master appointed by the court recommended the majority of the claim constructions in our favor.

A jury trial is scheduled for February 2026 in the second MediaTek action.

No schedule has been established by the court for the third MediaTek action.

A jury trial for the first MediaTek action has been rescheduled for March 2026.

A claim construction hearing was held in June 2024 in the second MediaTek action.

The special master appointed by the court recommended the majority of the claim constructions in our favor and in January 2025, the court adopted the special master recommendations.

The trial for the second MediaTek action has been set for November 2026.

The third MediaTek action has a claim construction hearing scheduled for June 2025, and the trial has been scheduled for April 2027.

ParkerVision v.

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In December 2023, TI filed a motion to change venue to the Northern District of Texas which the court denied in August 2024.

A claim construction hearing was held in June 2024, and the special master appointed by the court recommended the majority of the claim constructions in our favor.

A jury trial is tentatively scheduled for May 2025.

A claim construction hearing was held in June 2024, and the court issued its final claim construction order in November 2024.

The trial has been rescheduled for January 2026.

ParkerVision v.

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We filed a patent infringement action in the Western District of Texas against NXP Semiconductors ("NXP") in 2023, alleging infringement of three of our patents.

A claim construction hearing was held in June 2024, and the special master appointed by the court recommended the majority of the claim constructions in our favor.

A jury trial is tentatively scheduled for August 2025 .

Intel (USPTO) v.

ParkerVision (PTAB)

We appealed an IPR action, originally filed by Intel, against our U.S.

patent 8,190,108, ("the '108 Patent") which was asserted in ParkerVision v.

Intel in the Western District of Texas.

Following our February 2023 resolution of the infringement actions against Intel, Intel withdrew from the IPR cases;

however the U.S.

Patent and Trademark Office ("USPTO") has exercised its right to intervene to defend the PTAB's decisions.

In June 2022, the PTAB issued its final decision for the '108 Patent, determining that the challenged claims of the '108 Patent were unpatentable.

We appealed this decision to the CAFC and oral arguments were presented on May 9, 2024.

On May 16, 2024, the CAFC issued its decision upholding the PTAB ruling that the challenged claims are unpatentable.

A claim construction hearing was held in June 2024, and the court issued its final claim construction order in January 2025.

The trial has been scheduled for February 2026.

NXP has a motion pending to stay the case until such time that the PTAB has issued its rulings on pending IPRs (see Texas Instruments and NXP v.

ParkerVision (PTAB) below).

The court has not yet ruled on this motion.

TCL and LGE v.

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patent 7,110,444 ("the ‘444 Patent"), both of which are asserted in the infringement cases against these parties in the Western District of Texas.

Oral hearings for these IPRs were held by the PTAB in September 2022.

In November 2022, the PTAB issued its written decision ruling that the challenged claims for both patents were unpatentable.

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Supreme Court challenging the CAFC's use of Rule 36 to affirm PTAB decisions without a written opinion.

On March 24, 2025, the Supreme Court denied our petition.

ParkerVision (PTAB)

MediaTek filed an IPR petition in November 2023 against the '835 Patent, which is one of the patents asserted in the first MediaTek infringement action.

On May 23, 2024, the PTAB instituted the IPR petition.

In May, 2024, the PTAB instituted the IPR petition.

MediaTek withdrew its petition and the IPR was terminated in September 2024, following our dismissal of the '835 Patent from the patent infringement action against MediaTek.

On May 21, 2024, MediaTek filed a second IPR petition against the '686 Patent which is one of the patents asserted in the second MediaTek infringement action, and on October 18, 2024, MediaTek filed a third IPR petition against our '593 Patent, one of the patents asserted in the third MediaTek action.

The PTAB has not yet issued its decision regarding institution of the second and third MediaTek IPR petitions.

MediaTek filed a second petition for IPR in May 2024 against the '686 Patent which is one of the patents asserted in the second MediaTek infringement action.

The PTAB instituted this IPR in November 2024 and a final decision is expected in November 2025.

In October 2024, MediaTek filed a third petition for IPR against the '593 Patent, one of the patents asserted in the third MediaTek action.

The PTAB' instituted this IPR in March 2025.

Texas Instruments and NXP v.

ParkerVision (PTAB)

In May 2024, TI filed IPR petitions against all three of the patents asserted in our infringement action against them.

The PTAB has not yet issued its decision regarding institution of any of these IPR petitions.

Texas Instruments filed three petitions for IPR in May 2024 against each of the patents asserted in the TI action.

All three IPRs were instituted by the PTAB in November 2024 and a decision is expected by November 2025.

NXP filed petitions for IPR against two of the three patents asserted in the NXP action, which are the same as two of the patents asserted in the TI action.

Accordingly, in December 2024, the PTAB granted NXP's joinder motion to join the TI petitions.

ParkerVision (PTAB)

In June 2024, NXP filed IPR petitions against two of the three patents asserted in our infringement action against them.

Both of the IPR challenges are against patents also challenged in IPR petitions filed by TI.

The PTAB has not yet issued its decision regarding institution of any of these IPR petitions.

Other Contingencies

In July 2024, a public relations firm engaged by us in late 2019 threatened to file a claim against us for the collection of payment for billed and unbilled services totaling approximately $ 0.3 million purportedly performed by them under our engagement agreement during the period from December 2019 through May 2021.

In November 2024, the parties reached an agreement to resolve the disputed fees, and we have accrued our negotiated payment obligation in the consolidated financial statements for the period ended September 30, 2024.

In December 2024, Realtek filed petitions for IPR against two patents asserted in the second Realtek action, which are the same as the two patents under joint IPR by TI and NXP.

Realtek has filed a joinder motion to join the TI/NXP proceedings.

Stock Authorization and Issuance

Stock Authorization

On October 28, 2024, our shareholders approved an amendment to our amended and restated articles of incorporation to increase our authorized common shares from 175 million to 225 million.

Stock Issuances

Payment for Services

On January 2, 2024, we entered into an agreement with a third party to provide shareholder relations services.

As consideration for services provided under the twelve -month term of the agreement, we issued 120,000 shares of unregistered common stock for a non-refundable retainer for services valued at approximately $ 0.02 million.

The value of the shares issued is being recognized as consulting expense over the term of the agreement.

On August 1, 2024, we entered into an agreement with a third party to provide financial advisory services with respect to future development of our intellectual property.

As consideration for services provided under the twelve -month term of the agreement, we issued 250,000 shares of unregistered common stock as a non-refundable retainer for services valued at approximately $ 0.04 million.

The value of the shares issued was recognized as consulting expense during the three months ended September 30, 2024.

Private Placements

In December 2024, we entered into securities purchase agreements with accredited investors for the sale of 10,000,000 shares of our common stock and 2,000,000 warrants at a price of $ 0.50 per share for aggregate gross proceeds of $ 5.0 million.

The warrants are exercisable for a period of five years at an exercise price of $0.50 per share and have an estimated fair value of approximately $ 0.8 million.

The shares were registered for resale on a registration statement that was declared effective on April 24, 2025 ( File No.

333 - 286486 ).

Common Stock Warrants

During the three and nine months ended September 30, 2024 , 2.6 million warrants with an exercise price of $ 0.16 were exercised for proceeds to us of $ 0.4 million.

As of September 30, 2024 , we had remaining outstanding warrants for the purchase of up to 7.7 million shares of our common stock.

During the three months ended March 31, 2025 , 5.0 million warrants with an exercise price of $ 0.74 were exercised via net share exercise for no proceeds, resulting in the issuance of 1.3 million shares of our common stock.

As of March 31, 2025 , we had remaining outstanding warrants for the purchase of up to 9.7 million shares of our common stock.

The estimated grant date fair value of these warrants of $ 3.0 million is included in additional paid-in capital in our condensed consolidated balance sheets.

As of September 30, 2024 , our outstanding warrants have an average exercise price of $ 0.95 per share and a weighted average remaining life of approximately 0.8 years.

As of March 31, 2025 , our outstanding warrants have a weighted average exercise price of $ 0.97 per share and a weighted average remaining life of approximately 2.6 years.

Share-Based Compensation

There has been no material change in the assumptions used to compute the fair value of our equity awards, nor in the method used to account for share-based compensation from those stated in our 2024 Annual Report.

For the three months ended September 30, 2024 and 2023, we recognized share-based compensation expense of approximately $ 0.08 million and $0.09 million, respectively.

For the nine months ended September 30, 2024 and 2023 , we recognized share-based compensation expense of approximately $ 0.2 million and $ 0.4 million, respectively.

Share-based compensation is included in selling, general and administrative expenses in the condensed consolidated statements of comprehensive (loss) income.

As of September 30, 2024 , there was $ 0.13 million of total unrecognized compensation cost related to all non-vested share-based compensation awards.

For each of the three months ended March 31, 2025 and 2024 , we recognized share-based compensation expense of approximately $ 0.1 million.

Share-based compensation is included in selling, general and administrative expenses in the condensed consolidated statements of comprehensive loss.

As of March 31, 2025 , there was $ 0.4 million of total unrecognized compensation cost related to all non-vested share-based compensation awards.

The cost is expected to be recognized over a weighted-average remaining life of approximately 0.9 years.

The Company's effective income tax rate was 0.0 % for each of the three and nine months ended September 30, 2024 and 2023 as we expect to be able to utilize net operating loss carryforwards not previously recognized as a tax benefit to offset any income tax expense related to income, if any, for the 2023 and 2024 tax years.

Related Party Transactions

On May 10, 2024, we amended convertible notes held by three of our directors.

A June 19, 2019 note with a principal balance of $ 25,000 and a September 13, 2019 note with a principal balance of $ 50,000 , both held by Lewis Titterton, were amended to extend the maturity dates to March 15, 2026, reduce the interest rate from 8 % to 5 % and to replace the quarterly interest payments with a single payment of unpaid, accrued interest at the earlier of conversion or maturity of the notes.

On September 24, 2024, Mr.

Titterton converted each of these notes, including aggregate accrued interest, into an aggregate of 772,110 shares of our common stock.

On May 10, 2024, additional convertible notes with an aggregate principal balance of $ 475,000 were also amended to replace the quarterly interest payment dates with a single payment of unpaid, accrued interest at the earlier of conversion or maturity of the notes.

These additional amended notes include a $ 50,000 convertible note dated January 8, 2020 and a $ 200,000 convertible note dated May 10, 2022, both held by Lewis Titterton, a $ 100,000 convertible note dated May 10, 2022 and a $ 100,000 convertible note dated September 15, 2023, both held by Paul Rosenbaum, and a $ 25,000 convertible note dated August 3, 2022 held by Sanford Litvak.

On September 24, 2024, Mr.

Titterton converted his January 8, 2020 note, including accrued an unpaid interest, into 405,524 shares of our common stock.

In addition, on October 29, 2024, Mr.

Rosenbaum converted his May 10, 2022 and September 15, 2023 convertible notes, including accrued and unpaid interest, into an aggregate of 1,252,391 shares of our common stock.

Our share-based compensation expense includes share-based awards to third -party consultants.

During the three months ended March 31, 2025, we issued 250,000 nonqualified share options to a third -party as payment for consulting services over a one -year period.

In addition, we issued 100,000 performance-based RSUs to a third -party as incentive compensation under a 2025 agreement.

During the three -months ended March 31, 2024, we issued 120,000 shares of our common stock to a third party as payment for consulting services over a one -year period.

Segment Information

Our operations constitute a single reportable segment, focused on licensing our innovative, fundamental wireless technologies, often through patent infringement actions.

All revenues, operating expenses, and assets attributable to this segment are reflected in the condensed consolidated financial statements.

Our Chief Executive Officer and Chief Financial Officer, collectively, are considered to be the chief operating decision maker ("CODM").

The CODM uses consolidated net losses, along with consideration of certain significant cash and noncash expense categories, to assess performance by comparing to and monitoring against budget and prior year results.

This information is used to manage resources and invest in key strategic priorities.

Segment information for the three months ended March 31, 2025 and 2024 is as follows (in thousands):

Three Months Ended March 31,

Licensing gross margin

$ ( 54 ) $ ( 59 )

Interest income

Cash expenses:

Personnel related expenses

Litigation & legal expenses

Third-party consulting expenses

Patent maintenance expenses

Non-cash expenses:

Share-based compensation

Third-party consulting expenses

In-kind interest expense

Change in fair value of contingent payment obligations

2,461 ( 220 )

Other segment items 1

$ ( 3,799 ) $ ( 693 )

1 Other segment items primarily include costs incurred for insurance, shareholder and public relations, audit and other professional fees, outsourced information technology services, and employee travel.

Our segment assets represent our total assets as presented on the condensed consolidated balance sheets at March 31, 2025 and December 31, 2024 .

Subsequent Events

On April 15, 2025, the compensation committee of the Board authorized the modification of 8,000,000 fully-vested, nonqualified share options held by our chief executive officer and 1,000,000 fully-vested, nonqualified share options held by our chief financial officer.

The options, which were awarded to the executive officers in January 2021, are exercisable at $ 0.54 per share and had an original expiration date of January 11, 2026 .

The compensation committee extended the expiration date by five years, or until January 11, 2031 .

No other modifications were made to these awards.

We will recognize a one -time, non-cash charge to share-based compensation expense of approximately $ 1.9 million in April 2025 representing the incremental fair value of the options as a result of the modification, based on a Black-Scholes option pricing model.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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Recent Events

On September 6, 2024, the U.S.

Court of Appeals for the Federal Circuit ("CAFC") issued it opinion, ruling in our favor on each of the issues we appealed and remanding the case back to the Middle District of Florida (Orlando) where the case will be reopened.

Subsequent to September 30, 2024, our convertible debt was reduced by an aggregate of approximately $0.64 million as a result of conversions, at the option of the debt holders, into shares of our common stock at conversion prices ranging from $0.10 to $0.25.

In addition, we received proceeds of approximately $0.14 million from the exercise of outstanding options.

Liquidity and Capital Resources

We used cash for operations of approximately $2.1 million for the nine months ended September 30, 2024 and generated cash from operations of $11.5 million for the nine months ended September 30, 2023.

The decrease in cash generated from operations from 2023 to 2024 is primarily due to proceeds received from the patent license and settlement agreement entered into in February 2023, net of contingent legal fees and expenses paid.

At September 30, 2024, we had cash and cash equivalents of approximately $0.8 million, an accumulated deficit of $445.5 million, and a working capital deficit of $1.5 million.

At September 30, 2024, we had $2.4 million in current liabilities, including approximately $1.1 million in convertible debt that matures over the next twelve months.

We used cash for operations of approximately $1.8 million and $0.8 for the three months ended March 31, 2025 and 2024, respectively.

The increase in cash used for operations from 2024 to 2025 is primarily due to accrued bonuses paid and increases in legal, accounting and other third-party professional fees for services during the three months ended March 31, 2025.

At March 31, 2025, we had cash and cash equivalents of approximately $3.3 million, an accumulated deficit of $452.0 million, and working capital of $0.6 million.

At March 31, 2025, we had $2.9 million in current liabilities, including approximately $1.6 million in convertible debt that matures over the next twelve months.

Approximately $0.64 million in convertible notes, including accrued interest thereon, were converted by the holders into shares of our common stock subsequent to September 30, 2024, and all of our remaining convertible notes have conversion prices that are substantially below the market price of our common stock as of September 30, 2024.

We anticipate that all of our outstanding convertible notes will be converted by the holders prior to their scheduled maturity dates.

Our convertible notes have conversion prices that are substantially below the market price of our common stock as of March 31, 2025.

While we anticipate that all of our outstanding convertible notes will be converted by the holders prior to their scheduled maturity dates, conversion is at the option of the holder and there can be no assurance that the holders will convert prior to maturity.

Even with the anticipated conversions of our convertible debt, our current capital resources are not sufficient to meet our liquidity needs for the next twelve months and we may be required to seek additional capital.

Our ability to meet our liquidity needs for the next twelve months is dependent upon (i) our ability to successfully negotiate licensing agreements and/or settlements relating to the use of our technologies by others in excess of our contingent payment obligations, (ii) our ability to control operating costs, (iii) the exercise behavior of our convertible note holders, and/or (iv) our ability to obtain additional debt or equity financing.

We expect that proceeds received by us from patent enforcement actions and technology licenses over the next twelve months may not alone be sufficient to cover our working capital requirements.

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Financial Condition

Our working capital decreased approximately $1.8 million from December 31, 2023 to September 30, 2024.

This decrease in working capital is primarily the result of cash used in operations during the nine months ended September 30, 2024.

Our long-term liabilities increased $8.5 million from December 31, 2023 to September 30, 2024, primarily due to an overall increase in the estimated fair value our contingent payment obligations of $8.9 million.

Our working capital decreased approximately $2.1 million from December 31, 2024 to March 31, 2025.

This decrease in working capital is primarily the result of cash used in operations during the three months ended March 31, 2025 as well as $1.1 million of additional convertible notes due to mature in the next twelve months.

Our long-term liabilities increased $1.1 million from December 31, 2024 to March 31, 2025, primarily due to a $2.5 million increase in the estimated fair value our contingent payment obligations, partially offset by the conversion of $0.2 million of convertible notes to equity and the reclassification from long-term to current liabilities of $1.1 million of convertible notes that mature within the next twelve months.

Refer to "Change in Fair Value of Contingent Payment Obligations" below.

Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

Results of Operations for the Three Months Ended March 31, 2025 and 2024

Revenue and Cost of Sales

We reported no licensing revenue for the three and nine months ended September 30, 2024 or the three months ended September 30, 2023.

Licensing revenue was $25.0 million for the nine months ended September 30, 2023, resulting from a patent license and settlement agreement entered into in February 2023.

The parties' performance obligations were met in February 2023 and we recognized revenue at that time.

Cost of sales for the three and nine months ended September 30, 2024 and 2023 consists of amortization expense related to the patents covered under license agreements.

We reported no licensing revenue for the three months ended March 31, 2025 and 2024.

Cost of sales for the three months ended March 31, 2025 and 2024 consists of amortization expense related to the patents covered under license agreements.

Revenue resulting from our patent enforcement actions is highly unpredictable with respect to the amount and timing of receipt, and there can be no assurance that we will achieve our anticipated results.

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Selling, general, and administrative expenses consist primarily of litigation fees and expenses, personnel and related costs, including share-based compensation, for executive, Board, finance and accounting and technical support personnel for our patent enforcement program, and costs incurred for insurance and outside professional fees for accounting, legal and business consulting services.

Our selling, general and administrative expenses increased by less than $0.1 million, or 8.4%, during the three months ended September 30, 2024 when compared to the same period in 2023.

This is primarily the result of a $0.1 million increase in litigation fees and expenses.

Our selling, general and administrative expenses decreased by approximately $11.7 million, or 82.7%, during the nine months ended September 30, 2024 when compared to the same period in 2023.

This is primarily the result of an $10.9 million decrease in litigation fees and expenses, a $0.4 million decrease in compensation expense, including share-based compensation, and a $0.3 million decrease in consulting expenses.

The increase in litigation fees and expenses for the three months ended September 30, 2024 is the result of the settlement of a contingent obligation.

The decrease in litigation fees and expenses for the nine months ended September 30, 2024 is the result of contingent legal fees and expenses recognized in 2023 in conjunction with the confidential patent license and settlement agreement reached in February 2023.

The decrease in our compensation expense for the nine months ended September 30, 2024 is the result of bonuses paid and share-based awards issued to employees and executives in 2023.

As of September 30, 2024, we had $0.1 million of total unrecognized compensation cost related to non-vested share-based compensation awards that is expected to be recognized over a period of approximately 0.7 years.

The decrease in consulting fees for the nine months ended September 30, 2024 is primarily due to decisions not to continue or extend prior consulting arrangements as a result of changes in business strategy.

Our selling, general and administrative expenses increased by $0.5 million, or 60.8%, during the three months ended March 31, 2025 when compared to the same period in 2024.

This is primarily the result of a $0.1 million increase in litigation fees and expenses, a $0.3 million increase in consulting and public relations expenses, and a $0.1 million increase in accounting fees.

The increase in litigation fees and expenses for the three months ended March 31, 2025 is primarily the result of fees incurred to support our cert petition to the U.S.

Supreme Court which was denied in March 2025.

The increase in consulting and public relations fees for the three months ended March 31, 2025 is primarily due to third party services to support our social media public awareness campaign, financial advisory and shareholder relations fees, and fees for the engagement of a consultant by our compensation committee to benchmark executive compensation.

The increase in accounting fees is the result of a change in accounting firms in late 2024.

Change in Fair Value of Contingent Payment Obligations

We have elected to measure our secured and unsecured contingent payment obligations at fair value which is based on significant unobservable inputs.

We estimated the fair value of our secured contingent payment obligations using a probability-weighted income approach based on the estimated present value of projected future cash outflows using a risk-adjusted discount rate.

We estimated the fair value of our secured and unsecured contingent payment obligations using a probability-weighted income approach based on the estimated present value of projected future cash outflows using a risk-adjusted discount rate.

Increases or decreases in the significant unobservable inputs could result in significant increases or decreases in fair value.

Generally, changes in fair value are a result of changes in estimated amounts and timing of projected future cash flows due to increases in funded amounts, passage of time, and changes in the probabilities based on the status of the funded actions.

For the three months ended September 30, 2024 and 2023, we recorded aggregate increases in the fair value of our secured and unsecured contingent payment obligations of approximately $9.7 million and $2.9 million, respectively.

For the nine months ended September 30, 2024, we recorded an aggregate increase in the fair value of our secured and unsecured contingent payment obligations of approximately $9.0 million compared to an aggregate decrease of $0.2 million for the nine months ended September 30, 2023.

The change in fair value for the three and nine months ended September 30, 2024 was primarily the result of changes in the estimated amounts and timing of projected future cash flows due to changes in probabilities and time frames based on the status of various patent infringement actions, particularly as a result of the favorable CAFC decision received in September 2024 that remanded the Qualcomm case back to district court.

For the three months ended March 31, 2025, we recorded an aggregate increase in the fair value of our secured and unsecured contingent payment obligations of approximately $2.5 million compared to an aggregate decrease of $0.2 million for the three months ended March 31, 2024.

The change in fair value for the three months ended March 31, 2025 was primarily the result of changes in the estimated amounts of projected future cash outflows due to increases in accrued interest on our secured contingent payment obligation and increases in the net present value of our obligations as a result of decreases in the risk-free rates of return.

Off-Balance Sheet Transactions, Arrangements and Other Relationships

As of September 30, 2024, we had outstanding warrants to purchase approximately 7.7 million shares of our common stock.

As of March 31, 2025, we had outstanding warrants to purchase approximately 9.7 million shares of our common stock.

The estimated grant date fair value of these warrants of approximately $3.0 million is included in shareholders’ deficit in our condensed consolidated balance sheets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements